August 30, 2023 Washington, DC — Statement from Katie Smith Sloan, president and CEO, LeadingAge, the association of nonprofit providers of aging services, including nursing homes, elaborating on comments LeadingAge submitted August 29, 2023 to the Center for Medicare and Medicaid Services (CMS) on Calendar Year (CY) 2024 Home Health (HH) Prospective Payment System Rate Update (CMS-1780-P): 

“We emphasize the continued and, frankly, troubling, inconsistencies between the Administration’s rhetoric championing home and community providers and its actions, which contradict that. 

If the CY2024  rule is implemented as proposed, CMS will have reduced home health payment permanently by nearly 10% over the past two years. These cuts come when demand for our nonprofit, mission-driven members’ services is growing. The situation is unsustainable. Referral rejection rates are soaring. Labor shortages plague the sector; wage and other operational costs are rising. Home health providers, unlike employers in other sectors, are reliant on Medicare and Medicaid dollars for the bulk of their revenue. In this context, any reduction is burdensome. A nearly 10% reduction over two years will be devastating. 

On issues of equity – another Administration priority – it is worth noting that the home health benefit is particularly meaningful for underserved populations. Relative to the Medicare population as a whole, the home health benefit serves an older, sicker, more diverse, and poorer population. In the words of a member: “We will be the last ones there serving the poorest and most underserved in our communities…but each year of cuts makes it harder for us to continue to do that and remain in business. 

Even prior to his arrival in the White House, while on the campaign trail, President Biden prioritized support for quality long term care, with a particular emphasis on home and community settings. Once elected, his 21st century caregiving plan proposal, which called for major home and community sector investments, further affirmed that commitment. Yet, his administration’s payment policies undermine that position. 

Bottom line is this: Deep cuts force providers to make hard choices – including limiting or ceasing home health services altogether. Who will be hurt most? Older adults and families in need of care. Not a minute too soon, the Administration must align its policies with its rhetoric.”

Areas of comment focus: 

• Home health payment proposals 
• Workforce and current challenges to utilizing home health aides in Medicare home health.
• Hospice provisions including the proposed hospice special focus program and program integrity-related proposals.

Key recommendations: 

• LeadingAge recommends that CMS delay the proposed permanent adjustments and continue to delay the temporary adjustments. Since CMS maintains its position that their hands are tied regarding the directive to make all adjustments in aggregate, CMS should share as part of their annual budget request or through other avenues what authority changes they would recommend in order to be able to adjust the payment system more equitably. 
• There are higher acuity patients – whether they are dually eligible, coming from a safety net hospital, living in the community with few resources – for whom reimbursement and acuity are mismatched. We ask that CMS consider how to integrate this acuity more effectively into the behavioral assumption methodology as well as how to better account for acuity overall and ask Congress for the authority to adjust payment accordingly. 
• On the wage Index, we ask that CMS, at a minimum, provide a higher payment update as they have done in other sectors based on the most recent forecasts of the inpatient hospital market basket increase and productivity adjustment. 
• On rebasing the home health market basket: LeadingAge recommends holding off on rebasing and revising the home health market basket. Though CMS provides an analysis of what cost report data it utilized for each cost weight, the data simply does not add up. The proposed cost weights do not match the experience of our members. Across the board, all costs have increased for our members between 2016 and 2021 and these increases are not reflected in CMS’s proposal. We recommended that CMS utilize a technical expert panel or other means to further probe why their review of the 2021 cost report data deviates so strongly from the experience of home health agencies.
• Hospice Special Focus Program (SFP): LeadingAge asks that CMS work with the existing SFP TEP to: 
  • Improve the SFP algorithm methodology prior to its planned implementation on January 1 2024 
  • Implement a nationwide pilot of the updated algorithm with all hospices, during which SFP results will not be publicly posted, and hospices will be provided interim reports of their performance ranking under the updated SFP algorithm metrics.  

Because this may require a delay in implementation, we ask that CMS issue a new proposed rule with the modified algorithm to give stakeholders the opportunity to comment.